Please use data table to calculate Gliss’s oper
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please use data table to calculate Gliss’s operating income for 2019,

Transcribed Image Text:Eagle Tiles is a small distributor of marble tiles. Eagle identifies its three major activities and cost pools as ordering, receiving
and storage, and shipping, and it reports the following details for 2019:
(Click the icon to view the details.)
For 2019 Eaglebuys 220,000marble tiles at an average cost of $4per tile and sells them to retailers at an average price of $6per
tile. Assume Eaglehas no fixed costs and no inventories.
Requirement 1. Calculate Eagle's operating income for 2019.
Revenues
Costs:
Purchase cost of tiles
Ordering costs
Receiving and storage
Shipping
Total costs
Operating income
Requirements
1.
2.
Calculate Eagle's operating income for 2019.
For 2020, retailers are demanding a 4% discount off the 2019 price. Eagle's suppliers are only
willing to give a 3% discount. Eagle expects to sell the same quantity of marble tiles in 2020 as
in 2019. If all other costs and cost-driver information remain the same, calculate Eagle's
operating income for 2020.
3. Suppose further that Eagle decides to make changes in its ordering and receiving-and-storing
practices. By placing long-run orders with its key suppliers, Eagle expects to reduce the
number of orders to 600 and the cost per order to $40 per order. By redesigning the layout of
the warehouse and reconfiguring the crates in which the marble tiles are moved, Eagle
expects to reduce the number of loads moved to 3,425 and the cost per load moved to $48.
Will Eagle achieve its target operating income of $0.41 per tile in 2020? Show your
calculations.
Data table
-
✗
Activity
Cost Driver
Quantity of
Cost Driver
Cost per Unit of
Cost Driver
Placing and paying for orders of marble
1. tiles
Number of orders
900
$80 per order
2. Receiving and storage
Loads moved
4,300
$50 per load
Number of
-
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